Derive the government expenditure and tax multiplier

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Reference no: EM131205953

1. The structural model of an economy is given as below

C=400+0.8Yd Consumption function

I=350 Investment

G=450 Government expenditure

T=200 Tax

i) Derive the savings function

ii) Derive the government expenditure and tax multiplier

iii) Compute equilibrium income and consumption

Reference no: EM131205953

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